Lankan Ranger
ELITE MEMBER
- Joined
- Aug 9, 2009
- Messages
- 12,550
- Reaction score
- 0
Business aviation in India poised for growth
If the numbers are anything to go by, aircraft manufacturers have reason to be positive about India's business aviation market. The country's gross domestic product grew by 7.7% in 2009, according to World Bank data, and growth is expected to be strong in the years ahead.
In its latest market forecast, Bombardier expects 325 new business jet deliveries in India in the decade to 2019, adding to the fleet of 125 business aircraft in the country already. "Business jet sales should progressively accelerate in India due to economic growth and wealth creation," says Bombardier.
Embraer points out that the Indian economy, along with other emerging countries' economies, was not affected by the global recession as severely as other nations.
"It is identified with much potential for further growth and these are favourable to the development of the general business environment and, consequently, business needs that include the greater use of business jets as tools of the trade," says the Brazilian airframer.
For example, businesses with manufacturing facilities or plantations in other parts of India will help boost the need for business jets, Embraer adds.
FINANCING REGULATIONS
But even as India's business jet fleet is set to grow robustly, airframers are quick to point out that the outlook is not completely rosy. Government and financing regulations and underdeveloped infrastructure in India still remain very real challenges impeding the growth of business aviation, they say.
Taxation and regulatory red tape in India can make it difficult for potential business jet owners to acquire an aircraft, say manufacturers. High import taxes and difficulty in transferring money into and out of the country are among issues that are "not very favourable" for India's business jet market, says Trevor Esling, Cessna's vice-president for international sales. "These issues are certainly inhibitors to the fast acquisition of aircraft."
Hawker Beechcraft's regional vice-president for south Asia, Dan Keady, says banking and civil aviation regulations are two of the challenges facing India's business aviation sector. The Reserve Bank of India has "extreme control over the purchase of a business aircraft", says Keady, and rules laid down by the Directorate General of Civil Aviation are restrictive when it comes to training.
The shortage of developed infrastructure and lack of easy access to airspace and landing permits can also hinder the growth of business aviation in India, manufacturers point out. Hawker Beechcraft's Keady adds: "While general aviation has been around in India for years, the pace has outgrown the infrastructure."
There is a need to increase the number of fixed-base operations and facilities for private jets. A similar problem exists in China, another Asian economy where business aviation is expected to grow strongly.
"Airports tend to prevent business jets from landing at peak times, and without FBOs, business jet passengers need to be processed through the same terminal facilities as all other passengers," says Cessna's Esling. Operating costs at these facilities are "substantial", he says. "For a more even development in business jet demand, costs need to subside."
Restrictions on obtaining landing permits and access to airports are still concerns for aircraft manufacturers, but they acknowledge these have gradually eased as governments see the value of growing business aviation.
Bombardier adds: "As new airports are being built in China and India, the older airports potentially become available for business aviation, facilitating our operations and contributing to the growth of the industry."
Esling says he is "slightly more optimistic" about India's growth potential than that of China in the medium term, but notes China's stronger political will could give it an advantage. "The Chinese have the capacity to accelerate market development and are less burdened by bureaucracy when a clear path is determined by the authorities," he says.
Despite these challenges, airframers are not holding back in strengthening their resources in India. Cessna, which has a Citation service centre at Hosur airport near Bangalore, is looking to create another service centre in India.
Hawker Beechcraft is in the "final stages" of setting up a service centre in Mumbai, to add to an existing one in New Delhi. It is also planning a bonded warehouse this year to increase the availability of spare parts, says Keady.
GOOD BUSINESS
With such resources, airframers hope to capitalise on growth in the Indian market, which has so far provided good business for a wide range of products, they say. Gulfstream says it is selling across its product spectrum, and adds that long-range jets in particular will be in demand in India and China as businesses there grow globally.
Embraer, which has nine super-midsize Legacy 600s and three entry-level Phenom 100s in operation in India, says: "India is one of the few places in the world where we have been able to sell our full range of products."
Business aviation in India poised for growth
If the numbers are anything to go by, aircraft manufacturers have reason to be positive about India's business aviation market. The country's gross domestic product grew by 7.7% in 2009, according to World Bank data, and growth is expected to be strong in the years ahead.
In its latest market forecast, Bombardier expects 325 new business jet deliveries in India in the decade to 2019, adding to the fleet of 125 business aircraft in the country already. "Business jet sales should progressively accelerate in India due to economic growth and wealth creation," says Bombardier.
Embraer points out that the Indian economy, along with other emerging countries' economies, was not affected by the global recession as severely as other nations.
"It is identified with much potential for further growth and these are favourable to the development of the general business environment and, consequently, business needs that include the greater use of business jets as tools of the trade," says the Brazilian airframer.
For example, businesses with manufacturing facilities or plantations in other parts of India will help boost the need for business jets, Embraer adds.
FINANCING REGULATIONS
But even as India's business jet fleet is set to grow robustly, airframers are quick to point out that the outlook is not completely rosy. Government and financing regulations and underdeveloped infrastructure in India still remain very real challenges impeding the growth of business aviation, they say.
Taxation and regulatory red tape in India can make it difficult for potential business jet owners to acquire an aircraft, say manufacturers. High import taxes and difficulty in transferring money into and out of the country are among issues that are "not very favourable" for India's business jet market, says Trevor Esling, Cessna's vice-president for international sales. "These issues are certainly inhibitors to the fast acquisition of aircraft."
Hawker Beechcraft's regional vice-president for south Asia, Dan Keady, says banking and civil aviation regulations are two of the challenges facing India's business aviation sector. The Reserve Bank of India has "extreme control over the purchase of a business aircraft", says Keady, and rules laid down by the Directorate General of Civil Aviation are restrictive when it comes to training.
The shortage of developed infrastructure and lack of easy access to airspace and landing permits can also hinder the growth of business aviation in India, manufacturers point out. Hawker Beechcraft's Keady adds: "While general aviation has been around in India for years, the pace has outgrown the infrastructure."
There is a need to increase the number of fixed-base operations and facilities for private jets. A similar problem exists in China, another Asian economy where business aviation is expected to grow strongly.
"Airports tend to prevent business jets from landing at peak times, and without FBOs, business jet passengers need to be processed through the same terminal facilities as all other passengers," says Cessna's Esling. Operating costs at these facilities are "substantial", he says. "For a more even development in business jet demand, costs need to subside."
Restrictions on obtaining landing permits and access to airports are still concerns for aircraft manufacturers, but they acknowledge these have gradually eased as governments see the value of growing business aviation.
Bombardier adds: "As new airports are being built in China and India, the older airports potentially become available for business aviation, facilitating our operations and contributing to the growth of the industry."
Esling says he is "slightly more optimistic" about India's growth potential than that of China in the medium term, but notes China's stronger political will could give it an advantage. "The Chinese have the capacity to accelerate market development and are less burdened by bureaucracy when a clear path is determined by the authorities," he says.
Despite these challenges, airframers are not holding back in strengthening their resources in India. Cessna, which has a Citation service centre at Hosur airport near Bangalore, is looking to create another service centre in India.
Hawker Beechcraft is in the "final stages" of setting up a service centre in Mumbai, to add to an existing one in New Delhi. It is also planning a bonded warehouse this year to increase the availability of spare parts, says Keady.
GOOD BUSINESS
With such resources, airframers hope to capitalise on growth in the Indian market, which has so far provided good business for a wide range of products, they say. Gulfstream says it is selling across its product spectrum, and adds that long-range jets in particular will be in demand in India and China as businesses there grow globally.
Embraer, which has nine super-midsize Legacy 600s and three entry-level Phenom 100s in operation in India, says: "India is one of the few places in the world where we have been able to sell our full range of products."
Business aviation in India poised for growth
